This Week's Amazon News: New Year, New Policies - Amazon's 2025 Changes, Premium Beauty Push, Retail Media Updates, And More
The Year in Amazon vs Walmart, and a Look Into 2025
Amazon maintained its lead in consumer spending (10% of U.S. retail sales) over Walmart (7.3%) in 2024, while both retail giants expanded their digital advertising networks, loyalty programs, and innovation initiatives, with Amazon particularly strong in general merchandise and delivery speed while Walmart dominates in grocery.
Why 2024 Was the Year Sellers Became Less Loyal to Amazon
Amazon sellers are increasingly diversifying to platforms like TikTok Shop, Walmart Marketplace, and Shopify due to rising Amazon fees and complexity, with experts predicting sellers' Amazon revenue share to drop from 95% to around 75%, though most aren't leaving the platform entirely due to its massive customer base.
Amazon's Growth Persists Through Year of Pushback
Despite facing significant challenges in 2024 including worker strikes, seller backlash over fee policies, negative media attention from Netflix's "Buy Now" documentary, and ongoing antitrust investigations, Amazon maintained its growth trajectory and market dominance, largely because sellers remain dependent on its platform which accounts for most of their revenue and represents $750 billion in GMV.
Amazon's Premium Beauty Strategy for 2025 Includes Social Commerce
Amazon's beauty division is attracting premium brands like Clinique by demonstrating strong premium customer engagement and Prime member loyalty, with one-third of U.S. premium beauty customers shopping on Amazon; the platform plans to leverage its extensive affiliate program for social commerce expansion in 2025.
Amazon Sellers Are Concerned Over?Reimbursement Policy Overhaul
Starting March 10, 2025, Amazon will change its FBA reimbursement policy to only cover manufacturing costs instead of retail costs for lost or damaged inventory, requiring sellers to either share their confidential manufacturing cost data or accept Amazon's estimates, potentially reducing reimbursement payouts by 42-70% according to sellers.
Recap: Retailers with Retail Media Networks Made Important Moves in 2024
Major retailers significantly expanded their retail media networks in 2024, with industry leaders like Amazon generating $14.3 billion in advertising revenue and Walmart seeing 28% year-over-year growth, while other retailers like Best Buy, Home Depot, and Kroger launched new features and partnerships to enhance their advertising platforms.
Amazon Wrapped 2024! As we close out 2024, here’s our review of the top 10 Amazon news, trends, and initiatives that shaped the e-commerce ecosystem this year… ?
Post From Todd M. Piechowski, MPA :
After taking some well-needed holiday time away from the computer, I've caught up on Amazon's latest changes, and there are several significant updates that sellers need to be aware of as we step into 2025 -----
Reimbursement Policy Overhaul: This update introduces a new invoice and cost documentation system that changes how sellers manage their reimbursement claims. A major point of contention in the new policy revolves around Amazon's reimbursement calculations, the move towards a cost-based rather than resale value-based reimbursement model. Sellers may find themselves reimbursed at much lower rates than the actual market value of their lost or damaged inventory. The new system brings additional challenges:
Increased documentation requirements for cost verification
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Greater administrative burden for tracking and submitting claims
Potential exposure of supplier relationships and cost structures
Need for more sophisticated inventory and cost tracking systems
Amazon Associates Program Overhaul: Another significant change is Amazon's update to their Associates Program, effective December 20, 2024. The new policy prohibits "double-dipping" – creators can no longer earn commissions on the same traffic through multiple programs. This particularly impacts sellers working with platforms like Levanta, as creators must now use separate links without their Amazon associate tags for non-creator connection campaigns
New Conversion Path Report: A Step Forward (With Limitations) Amazon has introduced a new Conversion Path report in the ad console – While this release shows promise, particularly with its inclusion of New-to-Brand metrics for Sponsored Products, the initial rollout lacks crucial metrics like CPC, ACoS, CVR, and spend data. Currently, it's limited to viewing paths by campaign types, which may be too broad for day-to-day optimization decisions.
Other Operational Notes:? Amazon has introduced a new Product Selector module for storefronts, potentially offering interesting opportunities for guided product discovery.?
Additionally, sellers should note the upcoming USPS shipping pause on January 9th, 2025, which has been designated as a federal day of mourning for President Jimmy Carter's passing.
Post From Maarja Anderson Hewitt :
Retail Showdown: Amazon vs. Walmart
2024 has been a BIG year in the Amazon-Walmart rivalry, with both titans pushing the boundaries of innovation and redefining customer expectations.? Several great articles posted this week regarding the matchup between Amazon and Walmart, highlighting where it’s been and where it’s headed.?Here are my cliff notes:
KEY STATS
Market Share: Amazon holds 3.5% of consumer spending compared to Walmart’s 2.9% - according to early 2024 numbers.
Revenue Growth: Walmart's e-commerce grew 27% year-over-year in Q3 2024, outpacing Amazon's 7% growth in the same period.
Memberships: Amazon Prime dominates with 67% U.S. penetration, compared to Walmart+ at 30%.
AMAZON STRENGTHS
E-Commerce Leader: With its unmatched logistics and delivery speeds, Amazon accounts for 37% of U.S. e-commerce sales.
Advertising Powerhouse: Amazon's ad business, including Prime Video ad placements, is expanding rapidly.
Technology Investments: Innovations like robotics and regional fulfillment centers enhance efficiency.
WALMART STRENGTHS
Omnichannel Advantage: Walmart leverages its 4,600 U.S. stores for online order fulfillment and same-day pickup.
Retail Media Growth: Walmart Connect's ad business grew 26% year-over-year, supported by its vast physical and digital ecosystems, including their recent acquisition of Vizio.
Food and Grocery Expertise: Walmart excels in grocery sales, supported by membership perks like same-day delivery.
AMAZON CHALLENGES
Limited physical store network limits its ability to offer omnichannel shopping experiences. Slower e-commerce growth compared to Walmart.
WALMART CHALLENGES
Building momentum in non-grocery categories and digital innovation to compete directly with Amazon. Maintaining Walmart+ membership growth and renewal rates.
And the outlook for next year? Well, we will soon find out what 2025 holds for these major players, plus the 100+ other retailers fighting for a piece of the retail advertising $$$ pie. But looking ahead you can count on this Amazon-Walmart rivalry to continue to define the future of retail. ?
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1 个月Thanks for the share!